Car makers focus on bright side at Frankfurt show

HarrietTorry

-- Repeat of 2008-2009 financial crisis considered unlikely

-- But slowdown appears probable

-- Volkswagen sales chief expects growth next year

FRANKFURT (MarketWatch) -- Car makers at Europe's largest automotive fair largely shrugged off concerns over the industry's growth prospects in the face of market volatility and high sovereign debt in Europe and the U.S., with most manufacturers stressing their finances are stronger than in the run-up to the last financial slump and that a repeat of the 2008-2009 financial crisis isn't likely, although a slowdown appears probable.

"We expect the global car market to grow further next year... even though the risks have increased slightly," the sales chief of Volkswagen AG (VOW.XE), Europe's largest car maker by sales, told reporters on the sidelines of the Frankfurt motor show.

Volkswagen's message was repeated elsewhere: Daimler Chief Executive Officer Dieter Zetsche said he expects the auto industry to grow in coming years.

Daimler and Porsche also said turbulence in capital markets hasn't affected business so far. The general message is that order intake, a key marker of a car maker's development, remains at a stable level in most regions.

However, some automakers sounded a note of caution, particularly for car sales in Europe.

General Motors Co. (GM) Europe President Nick Reilly warned of "considerable overcapacity in Europe" in the non-premium market which he said could pressure pricing in the case of a renewed economic downturn.

"It is not an easy market and it is not [going to be] an easy market in 2012," Marchionne said, although he backed this year's targets for both Fiat and Chrysler, the U.S. partner in which the Italian auto maker owns the majority.

Volkswagen is touting small cars, taxis and car sharing as the next big things in emerging markets, where owning a car is still financially difficult for many consumers. Just 3.54 meters long, the Up! is smaller than the Golf or Polo.

However, a scrum of visitors at the IAA were vying to sit behind the wheel of Porsche's new 911 model, which features a six-cylinder engine with 350 horsepower that can accelerate to 100 kilometers per hour (60 miles per hour) in 4.6 seconds.

Electromobility and hybrid cars are another theme at this year's show. BMW AG (BMW.XE) Tuesday presented the electric i3 and the i8, a hybrid with an electric and combustion engine, which will hit the market in 2014 at the latest.

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